Describe waht is Product life cycle and explain its stages.

A company would have to use strategies outside of price to lure consumers in such as aggressive advertising, better customer support, market saturation,

This stage entails a business’s product to begin to drop in sales, reduce in publicity and popularity, it begins to lose its appeal and competition becomes stiffer and bigger, therefore fewer units are sold.

6 – Products and consumer perceptions are variable, so changes in strategy may be required to better address customer needs, technological developments, new laws and regulations, and the overall product life-cycle. By monitoring external conditions and shifting product development accordingly, a company can better target its consumers and learn to react to their needs.

Due to the growing competition and diminishing market share, companies are opting for different strategies to achieve their survival objectives as well as growth. Companies are thus executing grand strategies to provide their businesses with a clear direction for its strategic actions. These strategies, therefore, aim at both short term and long term sustainability and growth, and they include innovation, market development, product development, and concentration.

Suppose that we have a company called “Vinolia rental” that rent cars and it is facing competion. The car rental industry is considered to be in the maturity phase of the product life cycle. In the maturity phase, a firm must focus on maintaining their market share in the face of a number of diverse challenges market. Obviously, Vinolia rental must form a strategy to combat against further loss of market share.

The Product Life Cycle theory was developed by the economist Raymond Vernon in 1966 and this theory is a widely used model in economics and marketing. According to Raymond Vernon, a product has a certain life cycle. It begins with its research and development stage and ends with its decline stage. The product life cycle consists of four stages which are introduction, growth, maturity and decline stages. Millions of products are produced and consumed every year around the globe and these products have a life cycle. Existing or long-established products will become less popular and also the demand for new, innovative products will increase rapidly after they are launched.

Every product is subject to a life cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales fall. Marketers must do careful research on how long T.H.E life cycle of T.H.E product T.H.Ey are marketing is likely to be and focus T.H.Eir attention on different challenges that arise as T.H.E product moves.

The introduction stage of the life cycle will have few competitors that will gain awareness of our new product/service. Marketing mix factors of this stage include:

Through pricing, the organization manages to support the cost of production, the cost of distribution, and the cost of promotion. The product range and how it is used is a function of the marketing mix, the range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan.

Market penetration is an expansion strategy in business, whereas it chooses to market current products in the market it has been utilized. Nonetheless, businesses utilize this strategy, whereas the only way to innovate is to use existing products which would increase market share, corresponding to the commentary on "Growth Strategies" at gaebler.com. Additionally, the dollar sales a business control within a certain market, plus the percent of units is the market share vs. all other competitors. Notwithstanding, one way to increase market share is by lowering prices. To demonstrate, in the markets where there is inconsequential differentiation among products, a lower price may help a business increase its share of the market (Suttle, R, n.d.).

Profits arise due to an increase in output and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Accordingly, significant promotional resources are traditionally invested in products that are firmly in the Growth Stage (Anderson & Zeithaml, 1984). The growth phase offers the satisfaction of seeing the product take-off in the marketplace. This is the appropriate timing to focus on increasing the market share. If the product has been introduced first into the market then it is in a position to gain market share relatively easily. A new growing market alerts the competition’s attention. The company must show all the products offerings and try to differentiate them from the competitors. A frequent modification process of the product is an effective policy to discourage competitors from gaining market share by copying or offering similar products. Other barriers are licenses and copyrights, product complexity and low availability of product components (Product Life Cycle, 2011). Promotion and advertising continues, but not in the extent that was in the introductory phase and it is oriented to the task of market leadership and not in raising product awareness. This period is the time to develop efficiencies and improve product availability and service. Cost efficiency, time-to-market, pricing and discount policy are major

The battle of one-upmanship between Gillette and Schick also happens in any other industry where few companies dominate a market of particular products. The reason to perform the one-upmanship model is the company considers that their products have a particular lifetime, which raises the need to improve or even change the design, features, and product benefits. This so-called product life cycle also help the company to manage product in respond to some factors such as customers’ demands, technological changes, amendments in regulation, and many others (Kotler, 2003; Internet Center for Management and Business Administration, 2004).

Once the introductory phases are over, the product starts showing better returns on their investments. Your customers begin responding. There is better demand in the market and the product starts making money.

Marketing has made five major contributions to strategic management and product life cycle is one of them. (Biggadike, 1981)

In around two to three years my company expects the product to move into the growth stage. Growth is expected to increase by improving its marketing strategies, profit might be quite low for some time but on the long term it will have large sums of profit in return.